Fraud And Data Ruptures Could Spark A Consumer Revolt

Fatemeh Khatibloo, principal analyst at Forrester, will appear at AdExchanger's CleanAds I/O conference on June 3, an event addressing inventory quality and supply chain issues in the digital advertising ecosystem.

As adland moves to clean up the supply chain and weed out fraud, the consumer perspective on data safety risks is becoming an afterthought.

Fatemeh Khatibloo, principal analyst at Forrester, hopes to understand how data leakage tied to fraud ultimately affects everyday people. Though she’s still researching the topic, she does know one thing: If the industry doesn’t safeguard the consumer data it depends on, it could end up throttling the digital ad ecosystem.

AdExchanger spoke to Khatibloo.

AdExchanger: How has consumer perception of digital advertising changed?

FATEMEH KHATIBLOO: Consumer understanding of the digital ecosystem generally translates into their willingness to take action against what they perceive. Over the years we’ve seen a significant increase in the number of people using ad blockers. Advertisers and publishers need to be thinking about this. If we don’t get leaky data and downstream data collection under control, consumers will take action and the entire advertising ecosystem really suffers.

What’s causing a rise in ad blocker adoption?

Advertising can be pretty crummy. There are a lot of ugly ads out there or ads that autoplay, and people are tired of that. And more people are becoming aware that ads mean their data is being collected, and those things are becoming increasingly synonymous. Those two things drive the incredibly high adoption of ad blockers compared to some of the other technologies out there – things like white-listing on Ghostery or Collusion.

What are the risks of fraud and viewability from a consumer perspective?

It’s hard for me to say that bad tracking technology really increases the risk of data breaches, because we don’t have a lot of evidence of that. But when we have bad tracking technology or bad ad tech, the amount of data collection that’s happening downstream and the amount of reverse engineering of an identity is pretty high.

There’s a risk intrinsic to that, from a data leakage and data loss perspective, but there’s also a risk to publishers. If you’re letting data leak, you don’t have an audience to build rich segments and let advertisers target on your site, because that data is going everywhere. Where is your competitive advantage?

The risk to consumers is that their data is going everywhere and targeting can happen on external sites. The bigger risk is that we know this is happening and the media’s not going to let us or consumers forget it. Suddenly we don’t see on the order of 15% or 20% of people using ad blockers, we see 60% or 70% of US adults using that kind of technology. And then where are we? The value in the entire digital advertising supply chain goes away.

How is the industry responding to the media’s coverage?

Badly, if at all. Think about the Verizon supercookie/Turn debacle [read AdExchanger's coverage]. Turn could have been more proactive much earlier. Their clients didn’t know what was going on. Was all of the audience targeting they’d come to rely on Turn for going to go away?

There are real implications of not handling messaging and communication well. The flip side is when you are a company doing privacy well, like choosing vendor partners that have strong data governance and transparent opt-out practices, you have to be willing to say, “I’m choosing a different approach to my ad tech and to my site targeting.” Very few companies are doing that. If you’re on the leading side of privacy start talking about it, because you’ll drive others to do the same.

What can marketers do to take a front seat to viewability and fraud?

Understand each advertising and marketing tech relationship. I ask marketers, “What do you think happens when someone comes to your website and you’ve got a Facebook ‘like’ button on your home page or on a product page?” It’s astounding how many marketers think Facebook only sees a person has been to their website if they click the like button. They don’t understand that just being logged into Facebook and coming to the page is enough for Facebook to know they’ve been there.

Part of it is getting under the hood of all the tech marketers have thrown on their websites and understanding what it means, what’s been agreed to and what hasn’t. The other part is building relationships with the people who are actually responsible for data compliance. Marketers and IT are starting to play nicely together. The truth is that those are the people on the hook if something does go wrong with tracking technology.

How does data safety correspond to cross-device?

Cross-device is a holy grail for marketers, but it sort of breaks a consumer’s ability to be anonymous when they choose to be anonymous. As advertisers and marketers, we need to remember what it’s like to be a person buying stuff. If you take off the empathy hat of being a consumer when you put on your marketer hat, you loose a lot. At a human and consumer level, that’s the stuff we’ve got to figure out before we get too good at the technology.

The bridging of the physical world and the digital model of tracking and targeting is something to also be conscious of. Consumers are starting to understand that they are being tracked in physical locations. Forty-six percent of people we surveyed said that they wouldn’t shop from a retailer if they knew they were being tracked from a device without their permission. The idea of bringing everything we’ve learned in digital to physical locations is tempting, but people have a very different expectation of anonymity in physical locations. Advertisers and marketers need to tread carefully in that space.